This Penny Stock Cheaper Than a Cup of Tea To Raise Rs 170 Cr Via NCDs

Standard Capital Markets Ltd. (SCML), which operates as a small-cap non-banking financial company (NBFC), announced that on May 14, 2025, the company's Board of Directors, reviewed and authorized the issuance of 17000 unrated, unlisted, secured NCDs of Series IV, each with a face value of Rs. 1,00,000 and an issue price of Rs. 1,00,000, totaling Rs. 170 Cr.

Earlier it informed stock exchanges that it is looking to raise Rs 130 crore through a private placement of non-convertible debentures (NCDs). SCML plans to secure Rs 130 Crore via Private NCDs, as they are looking to confirm the allotment of 13,000 unrated, and unlisted as well as secured NCDs electronically for the highest face value bid of Rs 1,00,000. The cost for these NCDs is also set at Rs 1,00,000 which in total would account for Rs 130 crore.

Despite the rational SCML shares rose on the opening but ended Tuesday's trading session declining 8.70 percent lower at Rs 0.42 on the BSE which is cheaper than a cup of tea. Over the past five days, these stocks faced a sharp decline of 11%, further declining 23% in the last month and 58% YTD. The company currently has a market capitalisation Rs 72.66 crore.

Standard Capital Markets was formed in 1987 and has operated as an NBFC registered with the Reserve Bank of India since 2003. The company is headed by CA Narender K. Arora, Manohar Lal Vij, and Vijay Chaudhry who offer services ranging from lending to individuals as well as small and medium enterprises (SMEs), investing in stocks and bonds, and undertaking broker activities in the stock markets. It employs many qualified administrators, specialized in finance and management, to ensure efficient operations. In addition, the company manages a subsidiary known as Standard Capital Advisors Limited which is involved in merchant banking.

In terms of financial performance, SCML achieved a significant increase in revenue in the most recent quarter. The net sales for Q3FY25 reached Rs 20.28 crores which is a 106% increase from Rs 9.84 crores in Q2FY25. For the nine-month period ending December 2024 (9MFY25), the company declared a net sales figure of Rs 38.16 crores with a net loss of Rs 44.05 crores. In regard to the most concerning losses, the company posted a worsened quarterly net loss of Rs 45.10 crores in Q3FY25, which outpaced previous quarter losses of Rs 0.70 crores. For the preceding fiscal year, FY24, SCML reported net sales amounting to Rs 27.39 crores and a net loss of Rs 10.71 crores.

Notwithstanding the recent financial difficulties, SCML has achieved tremendous returns over the long term. The company has achieved a 173 percent CAGR profit growth over five years and has returned 360 percent over three years and 925 percent over five years, as multibagger returns.

As per the shareholding pattern of March 2025, promoters have been considerably diluted and hold 13.89 percent, while the public holds 86.11. The combination of low promoter retention and growing quarterly losses could also be a part of why the public is losing confidence. Meanwhile, the company is still trying to improve its financial structure, which could result in a positive shift in sentiment.